Every Monday I will answer one question from a reader and post my answer here.
The question of the day is this:
My friend asked to borrow money to buy a car. He works part time and says with a car he’ll be able to look for more work. He’s a good guy and I really like him but I’m afraid that he might not pay me back. I don’t want to lose my friend. What do I do?
This is such a great question!
TRUTH: Listen To Your Gut
You’re right to be concerned because money and friendship often do not mix well. The fact that you’re afraid to lose your friend tells me that you already are nervous and stressed about making this decision.
The one main problem is that everyone sounds sincere and willing to bend with your wishes when they want something. This includes borrowing money. It begins with good intentions and promises of paying back and then can blow up and become an all-consuming stressor.
TRUTH: Money is a Stressor
There’s a lot of inequality and imbalance in our world as to who has money, who needs it, who wants, and who thinks they deserve it. The thing is that hard work and utilizing your earning potential is key to independence. In other words–work for you money–you will appreciate the value more that way.
If you loan your friend the money and he doesn’t go get another job, are you going to feel used? If he shows up in new shoes but hasn’t paid you anything will you be suspicious? What if he starts to avoid you, what will you do? What if he pays back part of the loan and then loses his job?
There are so many scenarios and questions that can arise. Ask yourself if you’re ready to take on that stress.
TRUTH: You Could Lose the Friend, the Money, or Both
If your friend can’t pay the money back are you willing to say goodbye to that $1000?
If he doesn’t pay you back, makes excuses, or gets angry when you ask–are you willing to let that friendship die along with any hope of getting the money back?
Where do you draw the line? Answer this for yourself because it a very emotional issue and I believe the answer is already within you.
TRUTH: You Never Need to Reveal Your Financial Truth
The fact that a friend asked to borrow such a large sum of cash takes a lot of guts. Do they really know you have that money or are they just fishing? How do they know that? Why are you sharing your financial truth with others?
Your money situation is your business. If you want to sidestep the truth, you can tell your friend that you don’t have that kind of cash or that it’s all locked into investments for the year.
Whether you have $10 or $10,000 it’s no ones business. Money does not define you and you don’t want friends who are not authentic or want you for your money.
There’s nothing wrong with telling your friend that you can’t loan them the money because it’s not available to you. Stop there and there’s no need to explain.
TRUTH: It Really is OK to Say No
A friend comes to you with a request–prepare yourself to say no.
If the friend is genuine it’ll save the friendship, and save you $1000.
If you feel it necessary you can say “Sorry, but I have a policy never to loan money to friends.” If they push or get angry, you need a new friend.
I think this meme says it all…
Thanks for the great question.
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